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UPDATE 1-Antofagasta tops dividend forecast as profit falls

* Core profit falls 30 percent

* Payout ratio rises from 70 pct to 142 pct

* Worries over China growth weigh on copper outlook

(Adds analyst comment, detail, background, shares)

LONDON, March 18 (Reuters) - Chilean copper miner Antofagasta announced on Tuesday a unexpectedly large dividend payout for 2013, despite a 30 percent drop in annual core profit as falling metal prices and soaring costs offset an increase in output.

The London-listed miner said it would pay a final dividend of 86.1 cents per share, representing a pay-out ratio for the year of 142 percent of earnings, up from 70 percent last year.

This boosted the miner's annual dividend to 95 cents, far above analysts' average forecast of 38.9 cents and only slightly below 2012's dividend of 98.5 cents.

"We have been accumulating cash for some time. This money doesn't earn high interest rates, as you can imagine, in this market. Then we decided to give back to shareholders through (the) dividend while of course ensuring that we have got enough money to go ahead with our portfolio of projects," Chief Executive Diego Hernandez said.

Earnings, however, were hit by falling metal prices and rising production costs despite a small increase in Antofagasta's copper output last year.

The miner said annual core profit, or earnings before interest, tax, depreciation and amortisation (EBITDA), fell 30 percent to $2.7 billion, slightly below a company-provided analyst consensus of $2.74 billion.

The miner faces a tough environment for its key product this year. Copper prices on the London Metal Exchange fell by more than 7 percent last year on concerns over economic growth in top metals consumer China.

This month, renewed worries over credit constraints in China, where high volumes of copper are held as a collateral against loans, have hit the red metal, which has lost a further 12 percent so far this year.

"Antofagasta's pay out ratio is massive but structurally you can't maintain a payout ration of 142 percent. That sort of level of dividend is not likely to be sustainable unless the commodities surge and copper, as we have seen recently, has taken quite a beating," said analyst Marc Elliott at Investec.

Antofagasta share were up 3.7 percent in early trading, outperforming a flat UK mining sector.

(Reporting by Silvia Antonioli; Editing by Stephen Eisenhammer and Mark Potter)